As the fourth birthday of the Health and Safety Executive's
(HSE) controversial Fee for Intervention Scheme (the
"Scheme") passes we examine what the future holds, as
revenues continue to fall short of anticipated levels and the
Scheme finds itself challenged by judicial review.
The Scheme was launched in October 2012, following the
introduction of the Health and Safety (Fees) Regulations 2012,
which placed a duty on the HSE to recover its costs from those it
regulates. This extended the scope of the HSE's cost recovery
powers and allowed it to recoup the costs of any intervention
arising from the identification of a material contravention of
health and safety law by a dutyholder.
The Scheme required the HSE to concentrate, "on higher risk
industries and on tackling material breaches, while leaving those
dutyholders which pose a lesser risk and which comply with the law,
free from unwarranted scrutiny...lifting some of the regulatory
burden on them".
A gaping hole
At the consultation stage, it was anticipated that the HSE would
reap revenues of £43.7m per annum through the operation of
the Scheme. So, with the HSE now charging £129 per hour
for its Inspectors' time, has this income generating initiative
In short, no.
Figures obtained show that sums recovered have fallen well short
of anticipated levels, leaving the HSE with a gaping hole in its
At the consultation stage, the HSE forecast that it would reap
revenues of £43.6m per annum through the operation of Fee for
Intervention (FFI). Four years on, the HSE is now charging
businesses £129 per hour for its inspectors' time but the
money recovered is far lower than initially forecast.
The HSE has invoiced £35.3m and collected £26.2m in
FFI charges since 2012.Whilst year on year there has been an
increase in revenues, 2015/16 figures stand at just £11.3m -
some 74% less than had been originally hoped.
In 2013/14, the FFI revenue budgeted was £17 million but
only around £5 million was recovered. In 2014/15, the
budgeted income increased to £23 million, yet again only
around a third of this was actually recovered (£8.3m). This
year tells a similar story, with the HSE continuing to fall well
behind its projected figures.
In terms of industry specific impacts, unsurprisingly
construction and manufacturing have borne the brunt of the Scheme,
perhaps predictably as two of only three sectors still subject to
proactive HSE inspection.Construction companies have received
invoices equivalent to 27.85% of the overall total, with
manufacturing businesses in receipt of a huge 36% of HSE
Perhaps unsurprisingly, private companies have received
the bulk of the invoices raised from the HSE, with 82% of the
total issued. Individuals are the second largest group to be
subject to invoices, with the sums being over £1.77
The scope for successful challenge is limited. Just 39% of
queries and 19.5% of disputes have been upheld.
The HSE has even fallen short of the levels prescribed for the
Treasury cap on the FFI scheme, which requires it to return any
surplus sums to Central Government. The cap started at £10m
for 2012/13, rising to £17m in 2013/14, £23m in 2014/15
and £11m 2015/16.
An uncertain future?
Whilst FFI has not been the sweeping change anticipated, it has
remained contentious, so much so that the Scheme is currently the
subject of an application for judicial review. OCS Group UK
is seeking to have its FFI bill overturned and the HSE's
current system for determining appeals quashed on the basis that
the HSE acts as "prosecutor, judge and jury".
The judicial review hearing is yet to be fixed but is expected
to take place in May this year.
When granting permission to judicially review the Scheme, the
Court also had some strong words, saying, "It is arguable that
the HSE is, unlawfully, judge in its own cause when operating the
FFI scheme, and that the scheme is either unlawful or being
operated in an unlawful manner".
With the Scheme not reaching the levels anticipated in terms of
revenue collected, as well as the ongoing judicial review,
questions may be asked as to whether it can continue in its current
form. We will provide a further insight as to the future of the
Scheme once the judicial review process has been concluded.
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